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Mexico's Azteca plans Hispanic network in U.S.

Published on March 12, 1998.

MEXICO CITY -- TV Azteca is planning to create a third Spanish-language network in the U.S. Azteca Chief Financial Officer Adrian Steckel declined to identify Azteca's U.S. partner on the project, but says a formal agreement exists.

TV Azteca says it and its partner are jointly seeking to buy stations in U.S. His panic markets to build a network to compete with Univision and Telemundo. Azteca rival Televisa owns a 20% stake in Univision. Last November, an investor group led by Sony Pic tures Entertainment and Liberty Media Corp. bought Telemundo.

Steckel says they will likely make an official announcement of an initial pur chase some time during 1998. "We have always said [the U.S.] market was too big not to participate in some fashion," he says.

In its new venture, Azteca will also be restricted by U.S. Federal Communications Commission regulations limiting foreign companies to owning no more than 25% of a U.S. broadcasting station. For now, Azteca is planning on working with just one partner, to ensure cohesive management and unified ownership, Steckel says, though it would consider other options.

Azteca aims to buy bigger stations in California, Chicago, and the Southwest, and build out with affiliates from there, Steckel says. "We will concentrate on the Hispanic markets in the United States that are Mexican or of Mexican descent," he said.

Univision has attracted U.S. viewers with its offerings of Televisa soaps, a genre in which Telemundo does not compete. Given Azteca's success against Televisa in Mexico with telenovelas, Steckel says, "We think the key is high quality Mexican product; we have a proven formula that works."

The U.S. foray will follow Azteca's aggres sive international expansion in Latin America. Last year, it acquired a controlling interest in three foreign TV stations, in Guatemala, El Salvador and Chile, for a total of about $17 million.

It has earmarked between $80 and 100 million for more purchases in 1998, with three con tracts close to signing.